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- [00:02]
Carol Massar
When patients have a disease and the cause is known, it usually ends up.
- [00:06]
Tim Stenovec
Needing a specific solution. On the podcast targeting the toughest diseases.
- [00:12]
Carol Massar
We explore the innovative tools, methods and.
- [00:15]
Tim Stenovec
Unique philosophy Vertex Pharmaceuticals is using to search for treatments for some of humanity's most challenging diseases.
- [00:24]
Carol Massar
Subscribe today wherever you listen to podcasts. If a Lenovo computer for your business is on your holiday list, don't shop around. Just go directly to the source Lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business, like the ThinkPad X914, Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source Lenovo.com, where PCs are up to 35% off. That's Lenovo.com Lenovo Lenovo.
- [01:02]
Odoo Advertiser
Running a business is hard enough. Don't make it harder with a dozen apps that don't talk to each other. One for sales, another for inventory, a separate one for accounting. That's software overload. Odoo is the all in one platform that replaces them all. CRM, accounting, inventory, E Commerce, hr. Fully integrated, easy to use and built to grow with your business. Thousands have already made the switch. Why not you try Odoo for free at odoo? That's odoo.com hey, I'm Steffi.
- [01:33]
Michelle Korsmo
I go big for the holidays, so.
- [01:35]
Podcast Host (possibly Carol or Tim alternating)
I'm going to Famous footwear.
- [01:36]
Juliette Feld Grossman
With over 800 stores, you're never far from the perfect gift. So make your list and make it famous.
- [01:42]
Michelle Korsmo
Buy one pair, get one half off.
- [01:43]
Juliette Feld Grossman
At famousfootwear or famous.com Some exclusions apply.
- [01:50]
Podcast Host (possibly Carol or Tim alternating)
Bloomberg Audio Studios Podcasts Radio News this.
- [01:56]
Carol Massar
Is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Massar and Tim Stenovec on Bloomberg Radio hi everyone.
- [02:20]
Podcast Host (possibly Carol or Tim alternating)
Welcome to the Bloomberg Business Week Weekend Podcast. Well, another busy week on Wall Street. It was the last full week of trading in 2025. Hard to believe with investors parsing a few more earnings. And we got some data from the government on U.S. jobs and inflation and what all of this might mean for fed policy in 2026. A lot to think about as we get ready for a new year. Another thing, who will be the next chair of the US central bank in 2026? On the latter, the horse betting around that seemed to be in flux. Kind of changing. For the latest on all of this, though, check it out on the Bloomberg Terminal and bloomberg.com for a macro view.
- [02:57]
Carol Massar
Of the economy, the underlying risks and the health of the banking sector, private credit and AI. We caught up again with former investment banker Chris Whelan. That conversation in just a minute.
- [03:07]
Podcast Host (possibly Carol or Tim alternating)
Plus, the surge for power, getting the grids ready for it, and why these energy demands could slow down global economic growth. We get into that with the president of National Grid New York.
- [03:17]
Carol Massar
And bitcoin, the notorious energy consumer headed for its fourth annual decline in its history. Could bitcoin fatigue be setting in on the industry?
- [03:26]
Podcast Host (possibly Carol or Tim alternating)
Then in our second hour, the cost of celebrating Christmas, it's climbing again.
- [03:30]
Carol Massar
It depends on what you're buying.
- [03:33]
Podcast Host (possibly Carol or Tim alternating)
Hint, hint. Gold rings. Yeah, kind of pricey. All right, we're going to get into that. We're also going to get into what it may take to get the perfect custom ski boots. By the way, Tim knows a little bit about that. And then we get the market for big experiences.
- [03:47]
Carol Massar
We'll explain all that to come. We begin with the macro and the micro, from private credit to banking and yes, even some AI was someone who we turned to a lot during the great financial crisis.
- [03:58]
Podcast Host (possibly Carol or Tim alternating)
We're talking about Chris Whalen. He is chairman of Whalen Global Advisors. He worked at the New York fed in the 1980s. He has testified before Congress and the SEC. He worked on Wall street at such storied firms that are no longer around. We're talking about Bear Stearns and Prudential Securities. Chris is also co founder of the Institutional Risk analytics newsletter.
- [04:18]
Chris Whelan
It's eerie. The credit costs are trending down. Asset returns, thank God, are getting back to normal about 1.5%. But there's a lot we don't see. And that's what's worrying people. Whether you talk about Oracle or you talk about private credit. What people are worried about today is what they don't see in the data because they know that a lot of this is being fudged. And that's what worries me as well.
- [04:42]
Carol Massar
What do you think is being fudged?
- [04:44]
Chris Whelan
Things like loan losses. There's a lot of forbearance here in New York City for multifamily apartments. Our new mayor is threatening to start taking over buildings that landlords are not keeping up to his standards. Well, the city of New York can't afford to take care of them either. And so we have this accumulation of pressures, mostly caused by inflation, mostly caused by our friends at the Fed. But in their defense, why did they do that? Because we told everybody they didn't have to pay their loans and their rent for two years during COVID People forget that in the mortgage industry. In March of 2020, we were all looking at one another going, what are we going to do? This is after President Trump declared the emergency and said you don't have to pay your bills. Yeah, well, the Fed came to the rescue by dropping rates to zero. We caused a surge of home lending activity. Record volumes. And that float was borrowed to help everybody pay their bills.
- [05:40]
Podcast Host (possibly Carol or Tim alternating)
So why are we seeing more stress in the credit markets and why are we seeing records on Wall street and like it sounds like then some disconnect.
- [05:47]
Chris Whelan
I think part of the reason that the street has been doing well listed stocks is because you have a lot of liquidity coming out of private markets going back into more liquid markets. Makes sense, right? Private equity, private credit is a mess. And we all know that something like 15% of private equity companies in the US are paying in kind rather than in cash.
- [06:09]
Podcast Host (possibly Carol or Tim alternating)
Right.
- [06:09]
Chris Whelan
So, you know, waiting for the year.
- [06:11]
Podcast Host (possibly Carol or Tim alternating)
To like the exits and for things to move on.
- [06:14]
Chris Whelan
There's a lack of demand from banks for loans, except in one category, non depository financial companies, which is another way is say in private equity funds, credit shops like Ares and Apollo, they're the ones that have been aggressively expanding their business using money in part from banks. So the banks are now the facilitators. And what does this remind us of, Carol the 2000?
- [06:37]
Podcast Host (possibly Carol or Tim alternating)
Right, right.
- [06:38]
Chris Whelan
It's the same thing. You have non bank intermediation reliant on the bond market, equity markets and bank credit. And the thing is, eventually they're going to stumble and that's what everybody's worried about.
- [06:49]
Carol Massar
So, so what does that stumble look like? What is the shoe that drops?
- [06:52]
Chris Whelan
It looks like first brands, hello, we're defaulting. And most people had never focused on that company. It was a private, totally institutional play. The same thing with Tricolor Auto Lender that, you know, half of their customers were illegal aliens. Nobody had ever focused on this. It was an institutional story that suddenly surged.
- [07:13]
Carol Massar
So you think those, you think those two instances are canaries in the coal mine?
- [07:17]
Chris Whelan
I think they are typical of what we're going to see more in the future, which is you're going to see more of the missteps in the institutional non public market, which was supposedly better. Remember, everybody was selling us the idea that private was better than public. No, we have public markets because they're open and relatively liquid.
- [07:37]
Podcast Host (possibly Carol or Tim alternating)
Chris, you know, after the Jamie Dimon cockroach comment that there were many members in the private world that came out, or a few, I should say, that came on our air and that seemed to say, hey, listen, things are fine. And I understand many would say that they're talking their book, but are they systemic risks? Like, what's the exposure with the traditional financial sector when it comes to the private markets? Because I think that's what we care most about, right?
- [08:03]
Chris Whelan
No, I think the private players can fail tomorrow. It will cause a bit of kerfuffle and volatility in the markets. But are they systemic like a big bank? No, but the big banks will take their lumps too, because they are lending indirectly into these structures. They tend to take the most senior positions. But that may not save them. You see, the assumption that, okay, I'm senior and three quarters of the stack is below me and therefore I'm okay, that may not work this time around because you have leverage on leverage on leverage in some of these deals.
- [08:38]
Juliette Feld Grossman
So when.
- [08:39]
Podcast Host (possibly Carol or Tim alternating)
So when, like the big banks report again, we're getting ready for another earnings cycle.
- [08:42]
Chris Whelan
Right.
- [08:42]
Podcast Host (possibly Carol or Tim alternating)
You know, we'll get that, you know, in early, early January. So what do we look for for things like that? Like, what do you look for?
- [08:49]
Chris Whelan
Numbers are going to be wonderful. That's what worries me, you know, just as an analyst, we were supposed to have a recession last year. Credit losses largely peaked last year, third, fourth quarter. Yeah, they've been coming down since then. So if you look at the picture, you say, God, everything is great. You don't see a lot of utilization. You don't see a lot of demand from the banks for credit. They've got a ton of unused credit out there that they wish people would use. But so you don't see stress in the published numbers. Where you see stress is when you talk to professionals, when you read the really interesting media like Bloomberg and others that cover some of these stories. There was a great piece in the FT talking about Altus, a company that Jamie Dimon came to the rescue of, paid off their most restrictive loans so that they can go out and borrow more money. And all the credit guys that you're talking about looked at Jamie Dimon and they're going, hello, what are you doing? Yeah, so he's an enabler of bad behavior because Jamie has to go out and make money too, in a market where there isn't a lot of, you know, what I would call quality demand.
- [09:57]
Podcast Host (possibly Carol or Tim alternating)
Which reminds me of what would happen in the great financial crisis of people saying, I know it's getting messy and ug, but there was it the CEO of Citi at the time, I think who like came out and made some comment about I got to be in it.
- [10:09]
Chris Whelan
Yes and no. I think that some institutions have the common sense to pull back and say no, others don't. I'll give you an example. Pnc. PNC has the lowest loss rate in the top seven banks. They've always got also got one of the lowest funding costs. That's a fairly well run half trillion dollar bank that has managed to avoid risk I think often by saying no. The street wanted them to get more involved in certain things like prime brokerage, dealing with private equity funds, that sort of thing.
- [10:40]
Podcast Host (possibly Carol or Tim alternating)
Right.
- [10:40]
Chris Whelan
And they said no. So I think there are institutions that are very well run in this market. But again the banks are underutilized because the non bank financial companies have stolen their march and they are going to the customer and they're using wholesale funding from the big banks and they're in turn disintermediating them at the same time.
- [10:59]
Carol Massar
Chris, we want to talk a little bit about AI too in the time that we have left. We've talked about it with you before, circular financing. We're not sure how it all plays out in the economy and what it has to do with productivity and with economic growth. Weighing in on AI and its potential economic impact. Ken Griffin of Citadel speaking with Bloomberg's Dani Berger at a conference in Paris. Check out what he said. I think there is some chance that we will see meaningful progress in this field that will change the calculation or calculus that I'm setting forth. There are so many bright people in their 20s and 30s trying to unlock, trying to unlock true intelligence that this does create the environment in which a breakthrough may happen. But I think that generative AI as we know it today will have a very pointed but relatively limited impact on the broader economy. A pointed but relatively limited impact on the broader economy. Ken Griffin of Citadel, what in your view is the impact of AI on this economy?
- [12:00]
Chris Whelan
I think it's incremental. Better search tools, you know, we're writers.
- [12:04]
Carol Massar
So is he right?
- [12:05]
Chris Whelan
I think he is right and frankly I read a lot of the long haired stuff on AI. Some people in the scientific community and they tell you the same thing because this is the third or fourth, fifth time that we have talked about AI. You go back to the 70s and the 80s, not new. Remember Watson, IBM, which was a fiasco, but it was their way of showing what new technology could do. But is it creating general intelligence? No.
- [12:32]
Carol Massar
So is all this a waste? Is all this a way?
- [12:34]
Chris Whelan
No, it's Marketing, you know, never.
- [12:36]
Carol Massar
Yeah, but that's a lot to spend on market.
- [12:37]
Podcast Host (possibly Carol or Tim alternating)
But to spend.
- [12:38]
Chris Whelan
Yeah, but that's. Look, everything in the US Economy is about marketing, okay? It doesn't matter what it is. And if it's attached to a stock, then, you know, it's marketing in video. I've made a ton of money on Nvidia. I'm very grateful to Mr. Wang, but is he going to change the world? No. What we're doing is building a lot of infrastructure. We're spending a ton of money, not so much on building AI, but preparing to have the capacity to do it, mostly by studying the past. To me, that's not AI. AI is when a machine can start to observe what's around it and react and determine what to do next based on what it sees, not because of, you know, it studied our language for the last 50 years.
- [13:20]
Podcast Host (possibly Carol or Tim alternating)
So you're under. Like the whole idea of AI is all the data that's put in from the past. You think that. Okay, that's your take.
- [13:26]
Chris Whelan
All we have. Well, are you still in Nvidia? No, I got out. I got out. I wrote it up. It split. I wrote it up again. It split. When it gets to be a third of my portfolio, I've got to take the money and run. You know, with all due respect to Jim Cramer, who I'm very grateful to for getting me into that stock, but.
- [13:45]
Carol Massar
It sounds like you're saying that this. That we're in a bubble with. At least with the spend.
- [13:49]
Chris Whelan
Of course we are. That's what humans do. That's what markets.
- [13:52]
Carol Massar
So what happens when the bubble.
- [13:53]
Chris Whelan
The shiny object.
- [13:55]
Carol Massar
What happens when the bubble pops?
- [13:57]
Chris Whelan
We're going to see that a lot of the spend for AI will not be compensated with revenue growth. That's going to help to pay it off. And Oracle, I think, unfortunately, great company, is the poster child for this. They were following the crowd. They decided to double down and do even more. And the truth of the matter is one large language model. If all of the tech companies had gotten together and said, look, let's do this together. Right, Right. But the other problem, I think, is the metaphors that we use in this conversation is race with China. The Chinese don't use metaphors like that. When you listen to them talk about AI, it's part of a broader range of initiatives that they're trying to use to give them an advantage in the global economy. They don't see it as a race. This is all marketing hype. And we have to differentiate between the technology and the sell. Okay. Like we used to say about IBM, never mistake sales with, you know, delivery. No.
- [14:53]
Podcast Host (possibly Carol or Tim alternating)
All right, got to leave it there. Thank you. Really appreciate it.
- [14:56]
Chris Whelan
My pleasure.
- [14:56]
Podcast Host (possibly Carol or Tim alternating)
Chris Whelan, chairman of Whalen Global Advisors, joining us here in studio.
- [15:05]
Carol Massar
When patients have a disease and the cause is known, it usually ends up.
- [15:10]
Tim Stenovec
Needing a specific solution. On the podcast targeting the toughest diseases.
- [15:16]
Carol Massar
We explore the innovative tools, methods and.
- [15:19]
Tim Stenovec
Unique philosophy Vertex Pharmaceuticals is using to search for treatments for some of humanity's most challenging diseases.
- [15:28]
Carol Massar
Subscribe today wherever you listen to podcasts. If a Lenovo computer for your business is on your holiday list, don't shop around. Just go directly to the source Lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business, like the ThinkPad X914 Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source. Lenovo.com where PCs are up to 35% off. That's Lenovo.com Lenovo Lenovo.
- [16:05]
Odoo Advertiser
Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything, CRM, accounting, inventory, e commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business, whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o.com.
- [17:09]
Audiobook Host
Hey, audiobook lovers. This week on the podcast, I'm sitting.
- [17:12]
Carol Massar
Down with musician, producer and walking encyclopedia Questlove. We're talking about Mark Ronson's memoir, Night how to be a DJ in 90s New York City.
- [17:23]
Audiobook Host
All right, like we talked about before, Mark Ronson found sanctuary in the DJ booth.
- [17:27]
Carol Massar
What's a tool or piece of equipment.
- [17:28]
Audiobook Host
In the studio or on stage that.
- [17:30]
Carol Massar
Gives you the most control? So I have two microphones on stage we have the microphone that you hear as the audience. Then we have a second microphone in which we communicate with each other. I feel like that second microphone kind of saved all of our friendships. No band likes each other after 20 years or 25 years. Like the Beatles broke up in seven and a half years and we're going on 35. Listen to earsay the Audible and iheart.
- [17:59]
Audiobook Host
Audiobook club on the iheartradio app or wherever you get your podcasts.
- [18:10]
Carol Massar
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple Car, CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [18:24]
Podcast Host (possibly Carol or Tim alternating)
Global electricity demand in the US is surging that we know as massive data centers for AI begin to pop up. EV adoption rises and government incentives are boosting domestic manufacturing. All of that putting pressure on the power grid and the need for energy. This surge is outpacing older energy plants, straining power generation, transmission and distribution systems.
- [18:48]
Carol Massar
A report by the Albany Times Union mentioned National Grid New York and other utilities spending more than $4 billion to prep and modernize New York's electrical grid for a generational shift that includes things like AI, data centers, and more.
- [19:00]
Podcast Host (possibly Carol or Tim alternating)
The Albany Times Union goes on to say that this spending is for investments for which New Yorkers, many of whom are already struggling with utility costs, will have to pay for in the coming years. Now we have the perfect voice to talk about all of this.
- [19:14]
Carol Massar
Sally Librera, president of National Grid New York. It's the subsidiary of the publicly held electricity, natural gas and clean energy utility National Grid. It serves millions in New York and Massachusetts. Sally joined us in our studio.
- [19:28]
Sally Librera
So at National Grid in New York, we serve more than 4 million customers and we deliver natural gas and electricity to those customers. And our focus is on doing it safely, reliably and affordably. But the reality is there is increasing demand for energy across the entire state. And we serve through upstate, we serve in Long island, and we also serve in New York City. And it's our job to deliver that energy to meet that energy demand where, when and how folks need it.
- [19:59]
Podcast Host (possibly Carol or Tim alternating)
How would you quantify that demand, though? Give us some idea, because we're talking nonstop about deals of AI data centers, whether it's New York or elsewhere. Give us an idea how stressed is the situation.
- [20:10]
Sally Librera
So we work with our New York independent system operator, the niso. Yeah, and NISO manages a what we call the large load queue. So it's essentially the companies that have indicated wanting to hook into the New York grid that have large power needs. And they estimate that the cumulative power need across those companies that are essentially in line to connect sometime over the next five or so years is about 10 gigawatts of energy. And so just to give you some context, at our peak in New York, we demand about three times that across the entire state. And another really important point is that one year ago, that queue was one third the size. It literally tripled in just one year.
- [20:55]
Carol Massar
All data centers?
- [20:56]
Sally Librera
No, not all data.
- [20:57]
Carol Massar
What is it then? Because it does seem like for many years we thought that power demand, demand across the country would actually stay relatively flat. And it did stay relatively flat. But it just, in recent years, we've seen so much of an uptick in demand. What are you seeing on your grids?
- [21:12]
Sally Librera
Well, there's definitely, there definitely is the impact of data centers. But New York is also very attractive to manufacturing and large scale manufacturing, particularly some of the modern manufacturing we see around semiconductors and computer components. It's very energy intensive. And companies with big power needs are drawn to New York. And we are working to make sure that they have the power that they need, not just today, but well into the future.
- [21:38]
Podcast Host (possibly Carol or Tim alternating)
So it's interesting, right, because we think about this White House, right, and encouraging investment from foreign companies to build here. I mean, I guess, you know, that's the good thing, right? We want to see other companies investing into the United States. But there's a power grab on that too, right? As a result of that, in order.
- [21:55]
Sally Librera
To meet that, I think it is important to note that even if we weren't at this unique moment in time with rapidly increasing demand for power, we still have a grid in New York. And this is true across many places in the country. We have a grid that needs investment. We have assets that are close to 100 years old.
- [22:15]
Michelle Korsmo
Why?
- [22:15]
Podcast Host (possibly Carol or Tim alternating)
Right, Tim. Like how many people? Why? If it's 100 years old, why 20.
- [22:20]
Carol Massar
Years ago, why didn't we make the investment then?
- [22:22]
Sally Librera
Yeah, we have been very careful about balancing the bill impacts which customers bear with the investments that we make in our infrastructure. And even today, where we look at assets that are 70, 80, 100 years old, we're very strategic and pinpointed about which of those assets, which of those parts of infrastructure we replace, because we want to keep customer bills low. So we look for those opportunities where we can do multiple, multiple things with an investment, where we can replace an aging asset with something that's more modern and something that can carry more energy, something that can unlock more energy that our generators have to connect into the grid and something that's going to be more resilient to storms and better leverage technology so it's cheaper to maintain.
- [23:07]
Podcast Host (possibly Carol or Tim alternating)
How do you balance all of that? Like affordability, as you know, has become quite the word that we are hearing a lot, certainly in the political environment. So how do you keep your investors happy and the grid reliable without rising bills that make your customers furious and invite regulatory and political pushback? I mean, that is a hard mandate.
- [23:24]
Sally Librera
It is a difficult balance, and it's one that we navigate every single day. We do it through a number of avenues. We certainly work closely with our customers to help them manage costs. And we do that through a variety of bill assistance programs and energy efficiency programs and rebates. And we work. We've consistent. We have consumer advocates whose job it is to specifically work with folks in communities to help them manage their costs. We also, as I mentioned before, are very careful about where and how we invest in assets. And we make sure that if we're investing in an asset that we're going to get more power from investing in that asset, that we're going to get more resiliency and then we're going to get more efficiency from investing in that asset.
- [24:04]
Carol Massar
The president has been outspoken about his disdain for certain renewables, especially wind power. Your investment in renewables or sourcing energy from renewables, has that changed under this administration?
- [24:16]
Sally Librera
Well, we certainly support the all of the above energy approach and are pleased with the most recent version of the state energy report that leans into an all of the above approach. Given the rate at which demand for energy is increasing, we need to be utilizing all of those opportunities, from renewables to natural gas to nuclear, to make sure.
- [24:40]
Carol Massar
Is that more difficult? If the federal government is not supportive.
- [24:42]
Sally Librera
Of certain renewables, we are working on the infrastructure to move power from point A to point B. So while we support projects like, say, the Nessie Pipeline, that's a, that's a supply project. It's not our project, but we support it because we know how critical it is to the downstate community and how we're reliant. New York City and Long island are on natural gas and how thin that reserve margin is. And their energy demand for energy is growing as well. So we support Nessie for those reasons. The other side of our business is about building transmission. It's about building the highway over which the power moves. So the sourcing as to where it's coming from isn't, isn't a national grid decision. We work with generators of all kinds.
- [25:29]
Carol Massar
Of that was Sally Librera, president of National Grid New York. And just this week, after our interview with Sally, we got a new story from Noreen Malik, who covers energy here for Bloomberg News. She writes that calls are mounting for the largest US Grid operator to make electricity more affordable after power costs surge to a new high. Households and businesses will pay a record $16.4 billion to secure electricity starting in June of 2027. That's according to PJM Interconnection. It operates the 13 state grid.
- [26:01]
Podcast Host (possibly Carol or Tim alternating)
And let's remind everybody that this power grab and AI buildout is a global thing because there was a story about what's going on in the Netherlands. The Dutch national electricity grid is under enormous stress because of the immense amounts of power from all sources of energy being injected into the grid that their small power lines cannot handle. Both of what Tim said, this story, they really all highlight a major global issue because reliable electricity supports economic growth and vice versa.
- [26:29]
Carol Massar
That's exactly what we talked about with Akshat Rothi, Bloomberg News senior climate reporter and host of Bloomberg Green's Zero podcast. He joined us earlier this week. For the last few decades in the US and in Europe, those two regions, really, electricity demand was roughly flat or actually declining. It was mostly because of deindustrialization that is now reversing. And it's not just because of AI, of course, is a big contributor, but electric cars, heat pumps, just the general electrification of the industry is starting to speed up and these regions have not been prepared for growth. Akshay, I just want to show up in, I just want to jump in real quick because you said something that, that I haven't had a chance, A lot of people said I haven't had a chance to ask about it. If we're using EVs and we're using electric heat pumps, doesn't that mean we're, we're taking away, we're still heating our homes and driving. We're just using different sources of energy to do that. Is one better than the other? Well, yes, we are definitely using a different form of energy and one actually turns out to be way better. Because your electric car consumes about one unit of energy to move from electricity. It takes four units of gasoline to be able to moving the same distance. Same thing with heat pumps. Heat pumps take one unit of electricity to actually capture some of the heat outside, even in the cold weather to heat your home. So you're getting 3x the bang on the buck that you're spending on electricity than you would if you just burned Gas or oil in your heat pumps. So electricity is the more efficient form of energy use and the world wants more and more of it. And especially in North America and in Europe, the grids aren't ready to supply all that. So the Netherlands case that you pointed out, quite an extreme case, but actually it's not the only one. Pretty much in any G20 economy that we looked at, stress on the grid is growing. And Bloomberg Economics analysis which we report in our story shows that as that happens, economic growth slows down.
- [28:33]
Podcast Host (possibly Carol or Tim alternating)
I thought one of the lines also crucial in your reporting, Akshat, is that you say crucially, the analysis done by Bloomberg Economics finds that increase in grid stress leads to a decline in capital outlay, which is government and business spending to acquire or maintain long term assets. So the idea is as the stress is building the capital needed to maybe build it out, expand the grid, improve the infrastructure that is declining, to me, that just says, whoa, we are headed for some really mega stress points.
- [29:07]
Amanda Gotti
Indeed.
- [29:07]
Carol Massar
And the Bloomberg economics analysis also is kind of self limiting because when they were trying to understand the stress, the rise in demand was one of the stress points that they had to account for. But turns out when you have so much stress on the grid that either you're not able to connect businesses or price of electricity rises as a result of you not having enough supply, there is a demand signal in the market that is sent that we are not able to supply. And so demand comes down. And so the analysis itself is saying we cannot tell you just how much worse it could be. It can give you just a rough estimate, but basically if you can't get enough electricity supply, you're not going to help economic growth.
- [29:49]
Podcast Host (possibly Carol or Tim alternating)
Yeah, it just sounds to me like governments who are already spending in many ways, as we've seen, kind of a pushback on companies, countries working together, they're building out their own defense more, they're building out their own industry more. I mean, all of this costs a lot from a government perspective, but it sounds like governments are going to have to be much more involved. But that just also potentially raises debt in countries which for many like the United States is already problematic.
- [30:15]
Carol Massar
Yes. And there's two sides of this equation over here on spending. One is the generation of electricity that actually is manageable. The stuff that governments have not been spending enough on is actually building out the infrastructure to supply that electricity. And just if you wanted that supply, say next year, you cannot really ramp up the build out of the grid that quickly. You could ramp up supply pretty quickly. You could burn more gas, you could deploy more solar panels, which can be put within months for your solar farm. But to get your grid to be actually robust and supply more and more electricity to more and more places, yeah, that takes a much longer time. So the results aren't going to be coming anytime soon. That was Ashkat Rothi, Bloomberg News senior climate reporter and host of Bloomberg Greens 0 podcast.
- [31:04]
Podcast Host (possibly Carol or Tim alternating)
Still ahead on Bloomberg Businessweek, it's been a tough stretch for cryptocurrency, especially in the later part of the year. Might, though, the recent bitcoin fatigue be a setup for a rebound in 2026?
- [31:15]
Carol Massar
The CEO of crypto miner Mara weighs in. That's next. This is Bloomberg. This is the Bloomberg Business Week daily podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.
- [31:39]
Podcast Host (possibly Carol or Tim alternating)
Bitcoin is headed for its fourth annual decline in its history and the first one that didn't coincide with a major scandal or industry meltdown. Meltdown. The cryptocurrency is now down about 5 to 6% for the year. This as we were putting this show to bed, down around 30% though, from its October 6th all time high. With volumes low and investors bailing on.
- [32:00]
Carol Massar
Bitcoin ETFs, the bear market means bitcoin has decoupled from stocks with the S&P 500 closing at a record earlier this month and up 16% for the year. While bitcoin has struggled to find footing, bitcoin miner and accumulator Mara holdings knows all too well about the drop. Its own stock is down more than 36% so far this year and close to 28% of that float is short. So the question bitcoin is it set for a rebound next year?
- [32:26]
Podcast Host (possibly Carol or Tim alternating)
Those in the space certainly hope so. On that, we're joined by Fred Thiel, chairman and CEO of mara. He joined us from Paris.
- [32:33]
Carol Massar
The decline in the asset price this year, Certainly, you know, $126,000, that was a major high earlier this year. That was a big moment for the cryptocurrency, but down close to 30 or more than 30% from that. How much lower does bitcoin go?
- [32:49]
Tim Stenovec
I think bitcoin at this level is finding support in the kind of 84,000 range, which is just about where the break even point is on most ETF purchases, bitcoin ETF purchases. And that seems to be a level of support where essentially people, large investors who are Trying to defend their positions. If you would want to keep it above that level, which if it falls below that, you'd see more sales most probably out of the ETFs back into liquidity and Bitcoin, it's very much driven by global liquidity. You had expectations of more from the Fed and more clarity around market structure. But I think what you really have to look at is there was a huge run up in the kind of August through September into October period. And you know, a number of us felt the market was frothy in the beginning of Q3 and things were getting a little bit overheated. And you know, now we've seen some of that come off. You've also seen a lot of money that rotated into AI, now rotating out of AI and starting to rotate into more Dow stocks. And so I think you're generally seeing a risk off environment. Risk off tends to drive people out of bitcoin. But the liquidity that the federal government is going to inject in the marketplace, now that quantitative tightening is over, we're starting to see easing again. We believe that will bode well. The dollar's down, which also bodes well for Bitcoin. And I think you're going to continue to see bitcoin appreciate, but you've got to realize it's a very large asset class. It's a couple trillion dollars in size and it takes a lot to move the price. And I think what we're seeing now is just some healthy retracement.
- [34:43]
Podcast Host (possibly Carol or Tim alternating)
Hey, if I may just jump in for a moment. You know, I am wondering, Fred, you say that it's, it's a risk off environment and yet I'm looking at an S&P 500 that's still near its all time high. You know, we've seen quite a bounce back when it comes to The S&P 500, also a very big market. So I'm just curious, you know, how do you square that if, if we're seeing investors still willing to move into the equity markets but not crypto that disconnect?
- [35:17]
Tim Stenovec
Well, I think you have to. In regards to crypto, you have to look at the derivatives market, which is much bigger than the actual spot bitcoin market. And you have to see the sheer amount of leverage and positions that have come off since the peak. You know, you've gone from the $90 billion range down to the $30 billion range of open positions. And so that's a huge amount of leverage that comes off, which essentially sucks wind out of the marketplace. And People have been moving their money out of bitcoin, Bitcoin and into other things. I think you've also seen, look at the stocks, most of the secondary stocks have all seen a pretty large comedown since the peak. Even stocks such as Oracle, look at core. We've, you know, look at these stocks and how they've performed. And I think what you're seeing is a rotation out of some of those and into other stocks. And bitcoin is associated with technology, it's associated with a risk on assets and it's very associated with liquidity.
- [36:21]
Podcast Host (possibly Carol or Tim alternating)
So having said that, and you talked about the run up that we saw earlier in terms of crypto that where it got to maybe like frothy levels, we're now at what, 87,0807302 and change. So what do you think should be the level of crypto that makes more sense?
- [36:42]
Tim Stenovec
I think you have to look at the long term trend, but more importantly, go back little over a year ago, go 14, 15 months ago, no U.S. money Center bank would deal with crypto related companies, nor would they take crypto deposits, nor would they let you trade crypto, nor they let you wire money to crypto exchanges almost. And today you have every bank, including JP Morgan now moving ahead and doing all sorts of things with crypto. You're seeing tokenization of assets. DTCC has now gotten a no action letter from the SEC run tokenizing assets. You're seeing all sorts of activities around the traditional finance environment where they're embracing crypto. And I believe that what part of the effect of that is you're now going to see all sorts of things wrapped around crypto which will make the space much more relevant. But it takes time for those products to take effect get launched. And I think again bitcoin has had a great run, you know, over the past 15 years. It's been one of the best performing assets on record. And I think that we're going to continue to see great performance out of bitcoin over the coming years.
- [37:56]
Carol Massar
So Fred, you're a bitcoin miner. You're also a bitcoin accumulator. We've spoken to Eric Trump of American Bitcoin and I'm curious, he's also a miner, also an accumulator. What makes your company different than American Bitcoin?
- [38:11]
Tim Stenovec
Well, any company that mines bitcoin is performing the exact same service for the bitcoin network, which is essentially assembling transactions into blocks, competing to win the right to essentially add that block to the blockchain what differentiates Mara from American Bitcoin? A we own all our rather we own about 70% of our hosting operations. We're fully vertically integrated. We own power generation, we generate energy off of wind farms, off of flare gas and oil fields. We operate on four continents. We also are fully vertically integrated. From a technology perspective, we operate our own pool. We co founded the only US ASIC manufacturer for bitcoin mining. Asics. The rest of the market is all dominated by Chinese companies and we have been very proactive in helping drive a lot of the growth of crypto around partnerships with energy companies. And I think, you know, we're still considerably larger than American Bitcoin, not just in our mining operations but also in the amount of Bitcoin that we hold on our balance sheet.
- [39:22]
Carol Massar
On the identity part of this, trying to understand what the company looks like. You guys issued a statement this week saying you're not a digital asset treasury firm. You should not, so you should not be excluded from msci. Whereas the company said it has been adopting a bitcoin treasury strategy by holding its mined coins. What is the difference between being a Treasury company versus a company that adopts the treasury strategy? Help us with the nuance there.
- [39:46]
Tim Stenovec
Sure. So a bitcoin treasury company, for example, like Strategy or Microstrategy as it's formerly known as, has acquired all of its Bitcoin. By purchasing it, Mara has mined the majority of its Bitcoin. We've also purchased Bitcoin in the market, but most of our Bitcoin is the product of our mining operations. We have chosen to hold our liquid assets in Bitcoin because we believe again, better to hold our cash in the best performing asset class over the past 15 years than to hold it in Fiat which is continually losing its value, or just to hold it in Treasuries which will only pay a dividend of low single digit percentage points. So Bitcoin has been an excellent place for us to hold our cash and will continue to be so we believe over the long run. But we generate Bitcoin by mining bitcoin. We're not out in the market buying bitcoin on a regular basis like Microstrategy. We have from time to time gone into the market and bought it when we think it's very opportune. Last year there was an opportunity to buy Bitcoin when it was in the $60,000 range. And we bought Bitcoin because we had a feeling it was a belief rather that it was going to go up, which it did. And there are times where we're opportunistic like that. But we sell bitcoin that we produce to fund our operating expenses. So you know, we are not a company that holds our bitcoin. Every single bitcoin that we have, we actually sell bitcoin from production to fund our business. So we're an operating business. Bitcoin mining is our primary business and bitcoin just happens to be how we hold our funds.
- [41:25]
Podcast Host (possibly Carol or Tim alternating)
Fred, one thing I'm just curious though, going back to what we've seen in terms of the fatigue in the price and bitcoin coming down. You know what's interesting is, and I'm just, just looking at some of our reporting and commentary, you know, you've got a White House that's very much favored or favoring the digital currency world. You have the President declaring crypto a national priority. US Congress has passed a landmark stablecoin legislation and bitcoin exchange traded funds were raking in billions of dollars. You know, we've seen acquisitions, we've seen so much movement. And again I'm going back to the, the decline that we've seen in crypto. You it's a pretty favorable environment. So I mean is all of the good expectations in terms of news already priced in and it can't get much better?
- [42:15]
Tim Stenovec
No, I think like anything, any asset will revert to mean and bitcoin has simply reverted to mean. It has most probably overcorrected. But you had in the past six months a huge amount of accumulation by the plethora of digital asset. Treasury companies that were formed, you know, in the, you go back not too long ago was basically Microstrategy was the only real one. You had met a planet to a lesser extent, similar scientific was a smaller one and we were a large holder of bitcoin. That was kind of it. And then all of a sudden you had all sorts of companies come out of the woodwork. What did they do? They raised cash, they went and bought a bunch of bitcoin which drives the price up, right? Price comes up, people start putting money into ETFs, you start getting bigger derivative positions.
- [43:03]
Podcast Host (possibly Carol or Tim alternating)
Okay?
- [43:04]
Tim Stenovec
It's a flywheel effect. And if you just draw a trend line over the past number of years, you'll see bitcoin is just reverted to me.
- [43:10]
Podcast Host (possibly Carol or Tim alternating)
Gotta run. Fred, thank you so much. Fred Thiel, Chairman and CEO of MARA.
- [43:16]
Carol Massar
If a Lenovo computer for your business is on your holiday list, don't shop around, just go directly to the source lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business like the ThinkPad X914, Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source. Lenovo.com where PCs are up to 35% off, that's Lenovo.com.
- [43:47]
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- [44:50]
Audiobook Host
Hey audiobook lovers. This week on the podcast I'm sitting down with musician, producer and walking encyclopedia.
- [44:57]
Carol Massar
Questlove, we're talking about Mark Ronson's memoir.
- [45:00]
Audiobook Host
Night how to be a DJ in.
- [45:02]
Carol Massar
90S New York City.
- [45:04]
Audiobook Host
All right, like we talked about before, Mark Ronson found sanctuary in the DJ booth.
- [45:08]
Carol Massar
What's a tool or piece of equipment.
- [45:10]
Audiobook Host
In the studio or on stage that.
- [45:12]
Carol Massar
Gives you the most control? So I have two microphones on stage. We have the microphone that you hear as the audience. Then we have a second microphone in which we communicate with each other. I feel like that second microphone kind of saved all of our friendships. No band likes each other after 20 years or 25 years. Like the Beatles broke up in seven and a half years and we're going on 35. Listen to Earsay, the Audible and iHeart.
- [45:41]
Audiobook Host
Audiobook Club on the iHeartradio app or.
- [45:43]
Carol Massar
Wherever you get your podcasts. Stay cozy, stay home and save big online during Lowe's December deal drops. Because honestly, why go anywhere when the deals come to you?
- [45:59]
Podcast Host (possibly Carol or Tim alternating)
Check this out.
- [46:00]
Carol Massar
Lowes is going to give you two.
- [46:02]
Podcast Host (possibly Carol or Tim alternating)
Free select tools from dewalt, Craftsman or.
- [46:05]
Michelle Korsmo
Cobalt when you buy a select battery or combo kit.
- [46:08]
Carol Massar
Yep, two tools free. It's basically a holiday miracle.
- [46:12]
Michelle Korsmo
Plus rewards members get free standard shipping all month long. Yet another reason not to leave your couch.
- [46:17]
Carol Massar
Kick back, click around, let the savings roll in. Shop New December deal drops on Lowe's.com every week this month, fresh deals, cozy vibes, zero effort. You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [46:41]
Podcast Host (possibly Carol or Tim alternating)
Plenty ahead in our second hour of the weekend edition of Bloomberg Businessweek, including two CEOs, two very different worlds and both reshaping how we experience life and leisure.
- [46:50]
Carol Massar
The CEO of the privately held ski boot company Surefoot on why the right fit can change everything on the ski slopes and beyond.
- [46:57]
Podcast Host (possibly Carol or Tim alternating)
Then from carving turns to commanding crowds. The CEO of Feld Entertainment, the company behind some of the biggest live spectacles on keeping audiences coming back generation after generation.
- [47:08]
Carol Massar
First up this hour, the cost of celebrating Christmas. It's climbing yet again, at least according to data from the PNC Christmas Price Index CPI. See what they do there?
- [47:18]
Podcast Host (possibly Carol or Tim alternating)
Cute.
- [47:19]
Carol Massar
Now with its 42nd year, PNC has been keeping track of just how much the 12 Days of Christmas costs. And spoiler alert, it's gone up again this year.
- [47:27]
Podcast Host (possibly Carol or Tim alternating)
The report highlights labor market pressures, not tariffs to blame for some of the rising cost. We mean you lord the leaping and oh, one of the 12 days outshone all others in a price hike, breaking it all down for us. Amanda Gotti, chief investment officer at PNC Asset Management Group.
- [47:43]
Amanda Gotti
It's almost always more expensive. Thanks guys so much for having me. On a year over year basis, the Christmas price index is up 4.5%. So we are handily outpacing.
- [47:55]
Audiobook Host
Wow.
- [47:56]
Amanda Gotti
The BLS CPI version. So it's gonna cost true love this holiday season.
- [48:01]
Podcast Host (possibly Carol or Tim alternating)
All right, so wait, what's costing us more?
- [48:04]
Amanda Gotti
Well, sadly, I mean we talk about this every year, but sadly, my all time favorite gift is actually the biggest mover by far. So five golden rings. Do I have to elaborate on that?
- [48:16]
Podcast Host (possibly Carol or Tim alternating)
Gold went up. Gold was an outperforming asset.
- [48:19]
Carol Massar
Nobody asked for five crypto rings, five bitcoin rings.
- [48:22]
Amanda Gotti
No, no they didn't. Although they would have done okay for at least part of the year. But the five golden rings weren't up as much as the price of gold itself. Still up a very hot 32 and a half percent. It's really very much a reflection of what we think is a little bit of a margin Squeeze. Right. Late innings of the cycle. So still positive growth story for the economy, but margin pressures are building. And so we are seeing that in the price of the Golden Rings being passed through, or maybe not being quite fully passed through this holiday season.
- [48:54]
Carol Massar
Okay, so those are the golden rings. What else was. What's the second most expensive? Not most expensive, but the thing that went up the second most.
- [49:00]
Podcast Host (possibly Carol or Tim alternating)
Have you planned? Have you.
- [49:01]
Amanda Gotti
The pear tree.
- [49:02]
Carol Massar
Oh, really? Why is that?
- [49:05]
Amanda Gotti
Which. Which. Nobody wants a partridge. Okay, so the partridge was flat on a year over year basis, not a gift.
- [49:11]
Carol Massar
That's not a gift that keeps on giving. The pear Tree is.
- [49:14]
Amanda Gotti
It's an awful lot of work. But the pear tree is what we refer to as a proxy for housing costs. And so when we think about housing and the housing market in this country, clearly running pretty hot on a relative basis year over year. Affordability getting kind of challenged. Right. Even though mortgage rates have come down some, it hasn't made a huge difference in terms of supply and demand and inventory levels. We're still very short housing stock. So Pear Tree also running hot on a year over year basis.
- [49:48]
Podcast Host (possibly Carol or Tim alternating)
Also performers, right? I mean, the cost of labor, I guess you could kind of say.
- [49:54]
Amanda Gotti
Well, it's. Sometimes it is the cost of labor, sometimes it's contractual escalators. This year, the big one is the 10 lords of leaping. And I've been having fun all year talking about this one because Oasis has been the hottest concert ticket in town. You could refer to them as the Lords of Rock, perhaps, but. So this is the real world. Concert tickets, experiences, demand driving up those 10 lords.
- [50:19]
Carol Massar
Yeah. How do you measure that? Just on a. On a basis, like. Are you just looking at Oasis? Are you looking at everybody?
- [50:24]
Amanda Gotti
No, I'm teasing. I just. It's fun to try.
- [50:28]
Carol Massar
I mean, Talia went to an Oasis. Talia went to an Oasis concert at two Oasis concerts. I know one of them. Where did you go? Tell you. Our producers. Yeah. Scotland and la. She traveled all the way for Oasis from New York, like. So there are some serious fans.
- [50:41]
Amanda Gotti
Amazing. Yeah. Absolutely. As am I. But I don't have 10 lords laying around here. So we do our best to try and talk to dance companies and theater companies on a year over year basis. There's a method to this scientific madness. And so I'm just trying to make it a little bit relatable. The Lords, of all the performers were the biggest standout on a year over year basis. So naturally, it must be the Oasis effect.
- [51:08]
Podcast Host (possibly Carol or Tim alternating)
If only I had ten Lords of Leaping just hanging around somewhere Just kidding. Just kidding. Hey, what stayed the same or did anything go down?
- [51:16]
Amanda Gotti
Oh, almost nothing goes down. Let's get real here. I would love to say, aside from the pandemic when we had to shut the lights off on a lot of the performers and experiences, just as a function of what was happening in the real world economy, a number of gifts did stay flat on a year of year basis. So two turtle doves, three French hens, four calling birds, the seven swans, the eight maids. So there was a decent amount of stability on a year over year basis, but some pretty significant moves in the top three or four on a year over year basis.
- [51:51]
Carol Massar
This is fun, and we do this because it's fun, but it also does give us an opportunity to talk about the real world inflation that we're seeing and also real world asset price movements. Amanda, overall, the index, it moved more than headline figures when it comes to cpi.
- [52:09]
Amanda Gotti
It sure did. And that's not always the case. But you have to think about the gifts in the Christmas price index as a very specialty gift basket of goods and services. So it's not really a reflection of the broad economy. And the US Consumer in total, it tends to lean higher end in terms of the spectrum there. But I think it is a good indicator for what some of the pricing trends may look like this holiday season. So the consumer is definitely hanging in there on a relative basis. We definitely see consumers continuing to spend and retail sales data continues to look solid. Holiday shopping looks good, but it's definitely going to cost consumers this holiday season.
- [52:52]
Podcast Host (possibly Carol or Tim alternating)
Yeah. What's the next? I'm curious about what data points you're kind of keeping an eye on to get an idea of what happens maybe in the first half of 2026, or is it too soon to kind of make a bet on anything we see over the next couple of weeks?
- [53:06]
Amanda Gotti
Well, I don't know if it's too soon necessarily to bet on it. I think the challenge is that some of the data is stale, so it's hard to extrapolate a trend from data points that are old or maybe incomplete. So as it relates to consumer health, and we're obviously focused on how the holiday shopping season plays out, retail sales data, savings rates, even just consumer sentiment, there's a number of other, you know, components and indicators that we can use to gauge the success of this, this holiday season and perhaps even the market's path forward in the new year.
- [53:41]
Carol Massar
So good shape? We're in good shape.
- [53:44]
Amanda Gotti
Very briefly, I think we're in good shape.
- [53:45]
Carol Massar
Okay.
- [53:46]
Juliette Feld Grossman
Yeah.
- [53:46]
Podcast Host (possibly Carol or Tim alternating)
Unless you're buying five golden rings or you're getting 10 lords a leaping or.
- [53:51]
Amanda Gotti
Unless you're trying Piper might not be is Oasis still might not be in good shape, but the rest of us are in good shape.
- [53:57]
Carol Massar
You're in good shape unless you're looking for Oasis tickets because apparently they're not touring anymore. So that's it. You missed your chance.
- [54:05]
Podcast Host (possibly Carol or Tim alternating)
Amanda, thank you so much. Have a great holiday season. Happy New Year. Amanda Gotti, chief Investment Officer, PNC Asset Management, joining us from Philadelphia. I love these kind of, they're just fine.
- [54:15]
Carol Massar
We have fun with this one.
- [54:16]
Podcast Host (possibly Carol or Tim alternating)
But it's I, you know, this gold.
- [54:17]
Carol Massar
Ring, sometimes the price of gold does not go up. So. No.
- [54:22]
Podcast Host (possibly Carol or Tim alternating)
Right. And there was a long period. So.
- [54:24]
Amanda Gotti
Yeah.
- [54:24]
Podcast Host (possibly Carol or Tim alternating)
But if you go out shopping and.
- [54:26]
Carol Massar
You'Re looking for jewelry, gold rings, that's what you think. Diamonds are a better deal.
- [54:30]
Podcast Host (possibly Carol or Tim alternating)
Might be a little expensive.
- [54:31]
Carol Massar
You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch watch us live on YouTube.
- [54:45]
Podcast Host (possibly Carol or Tim alternating)
We got another read on the economy this past week after Darden Restaurants, the owner of the Olive Garden and Longhorn Steakhouse, raised its comparable sales forecast, citing better than expected growth fueled by more affordable meal options and strong spending from higher income diners. The company also talked about beef prices, the CFO saying they are expected to fall next year as production increases.
- [55:07]
Carol Massar
Some good news there, but overall, we've seen really mixed results from the restaurant sector this year. Sweetgreen CEO stepping down this week after shares dropped about 80% so far this year. Kava is down 60% from this year's high. Chipotle is down about 45% from last year's highs.
- [55:23]
Podcast Host (possibly Carol or Tim alternating)
All right, so lots of questions out there when it comes to the restaurant industry. We wanted to know what's going on and how it and the US consumer may fare in 2026. On that, we caught up with Michelle Korsmo, president and CEO of the National Restaurant Association. That's the trade group for the industry.
- [55:40]
Michelle Korsmo
So we've seen $1.5 trillion in restaurant industry sales in 2025, which is up from last year, strong as it needs to be and not as strong as we want it to be in these really tight margin businesses. And what we found is it kind of depends on how you're leaning into that price certainty for customers, value matters. Price certainty really matters. And so you see that making a difference as they're also navigating all of the tariff and supply chain and beef price problems that you've just talked about.
- [56:08]
Carol Massar
Yeah, we're going to get to some of the challenges in just a minute. So that's how your members are doing. Your members depend on consumers. From your perch, how's the consumer doing? And it's not monolithic by any means, but. But how would you describe the US Consumer right now?
- [56:24]
Michelle Korsmo
So the US Consumer right now, I would say is very deliberate. They want to be certain about what they are spending and how they're doing it. And that's really a place where restaurants have been able to lean into some of that certainty in the office offerings they have and the pricing. But it's definitely been a situation where we're not seeing as much traffic as we normally would. We always want to see those guest count numbers going up in restaurants, and it hasn't been going up at the level that people want.
- [56:54]
Carol Massar
Okay, so I just want to go through some of the challenges. You mentioned some of the challenges. You said the tariff related challenges, the beef price challenges. What is the biggest challenge that restaurants are facing?
- [57:08]
Michelle Korsmo
Certainty. I think with every industry and with every business, what everyone is looking for is certainty. And we certainly know that the President has an aggressive agenda to try to make a strong economy for U.S. consumers. But the lack of certainty actually creates something that feels quite the opposite. When restaurants are dealing with how to navigate different pricing, supply chain problems, tariff, price increases changing from day to day. That definitely gets to be a bit of a challenge for restaurants trying to serve consumers that are looking for that certainty.
- [57:44]
Carol Massar
You know, one thing that we seem certain about is immigration. And this, this note from Torsten Slok at Apollo really caught my attention. He writes, From 2022 to 2024, net immigration was around 3 million people per year. The CBO forecasting that annual immigration in 2025-2026 will be around 500,000 people. Torsten writing, quote, this has important consequences for labor supply, wage growth and housing demand. From a labor supply issue that affects your members, but also from a customer's perspective, that affects your members. Which one is harder for the restaurants in the US Right now? Is it the lack of workers from immigration that. Yeah, that lack of customers from immigration.
- [58:27]
Michelle Korsmo
That feels like a Hobson's choice. So without a doubt, the restaurant industry really cares about ensuring that we've got enough workforce to help provide that great hospitality that makes people love restaurants. And there's 988,000 open positions in restaurant and hospitality this month. So we need workers. And this is why it's been a significant issue for us to push for immigration reform. We need more legal pathways for guest workers, worker programs, more opportunities for people to come in and do this work, even as a guest worker, in a legal, documented fashion. And so getting to that solution is something we're really pushing for for Congress because we need to get people in jobs in restaurants. The consumers need it.
- [59:13]
Podcast Host (possibly Carol or Tim alternating)
Well, big problem. That's a lot of workers that aren't. That the industry needs. Is the White House listening? Are members of Congress listening? Listening?
- [59:22]
Michelle Korsmo
We never feel like they're listening enough on immigration. So there always seems.
- [59:27]
Podcast Host (possibly Carol or Tim alternating)
But are they listening less than maybe they were in years past recent years?
- [59:32]
Michelle Korsmo
This has been a difficult issue. In fact, some would call this the third rail in terms of issues that Congress deals with for decades, frankly. And we get close often, but we need to get it across the finish line. And so that that's really what we're pushing, is it's time for them to realize that it has to provide some legal pathways because we're seeing, I mean, those numbers that you're talking about with immigration coming down, I think we're going to see in 2025, in reports I've read, that this will be the first year that the US Population will not have increased. And that's a significant impact on our workforce. And so we care a lot about making sure that we've got enough workers in the restaurant industry. Industry. You know, there's certainly a lot of places for technology to take jobs, but hospitality is still built on people and personal interactions. So we want those people to work in restaurants. And we want obviously, a robust economy with lots of consumers that are coming in to enjoy those restaurants.
- [60:30]
Podcast Host (possibly Carol or Tim alternating)
Well, you know, and I just want to go back to the speech that President Trump gave last night, the primetime speech, and he talked a lot about immigrants and immigration, but he said a lot of the immigrants, and forgive me, and I should have the exact quote in front of me, but basically that a lot of the immigrants that are coming in are criminals and so on. What's the restaurant industry's experience with immigrants who come into the United States? And I realize there's legal, there's illegal, so I'm just. But there's a lot of folks that maybe aren't legal that are in the restaurant industry. You might hear that kind of on the side. So I'm just curious about that commentary from the president and the reality of what it really is all about.
- [61:10]
Michelle Korsmo
We don't think that that commentary tells the full story. And I think we want to start with A complete agreement that people that are breaking laws, especially those laws that are hurting Americans, really aren't, you know, as illegal immigrants, certainly not a place for them here. And so creating a safe environment for Americans is really important. But there's a lot of people who are showing up every day, working hard, being reliable, taking care of their families, doing the right thing, mowing their lawn, all of those things that make your neighbor somebody that is friendly and reliable that you want to see. And so this is why it's important to us that we push for more legal pathways to guest worker programs, because those people need to be in our communities contributing. And obviously we need to, to deal with the people that are breaking the laws. But for those people that want to work hard and show up and contribute to our economy, let's find a place for them to do that.
- [62:09]
Carol Massar
Beef prices still up 13% so far this year, though they're down from the highs that we saw in August and September of this year. We've spoken to you in the past and we've, we've talked about inflationary concerns, but it hits restaurants different because the margins are so tight. What are the biggest costs right now for your members?
- [62:30]
Michelle Korsmo
So beef costs for sure. We're seeing a lot of fluctuation on seafood. One of the things that we're seeing in the data that we're trying to figure out is a lot of data is showing seafood as a protein price going down. But what our members are telling us from our survey work is that they're seeing increased seafood prices. And so there's a lot more we've got to figure out there. And I think this, this is a place where tariffs or the threat of tariffs is really hurting that supply chain, especially as whatever happened to be in the warehouse under a pre tariff price really starts to deplete. And so I think anytime you're looking at proteins, that's going to be a place where people are concerned. And then anytime you're looking at any kind of vegetable or produce, we want to make sure that those tariffs stay off as well. Because we can't produce in the United States the amount of produce that we consume on a regular basis. And we certainly can't produce it year round, Michelle. Not, not in D.C. in the winter.
- [63:32]
Carol Massar
That is, that is true. And even in California doesn't, you know, satisfy the entire country or provide for the entire country. Hey, before we let you go, we got to talk about cold hard cash, specifically the penny. I was surprised on our editorial call when our producer Ari said that this is A big issue for you guys costing your restaurants 13 to 14 million dollars monthly in forced rounding losses. Explain what's going on with the penny.
- [63:56]
Michelle Korsmo
Well, it is certainly interesting and nobody really had on our bingo card for 2025 that we would be talking about penny shortages. But for some reason that we can't quite figure out, the Fed has stopped circulating pennies. So the Federal Reserve does a really important thing by keeping money and coins circulating around the country so that we've got the right level of those coins and bills in the right areas and regions. And right now they're not doing that with pennies. And so we're seeing pennage shortages. And so often consumers are coming in and paying cash. In fact, I think people would be surprised to know that one in four transactions in restaurants is a cash transaction. So people are coming in paying cash and often they can't get exact change. So that's creating a difficult situation for consumers. But also that difficult situation that you cited in the 13 to 14 million dollars a year in lost revenue for restaurants.
- [64:50]
Podcast Host (possibly Carol or Tim alternating)
Wow, that's a real number. It's interesting. My understanding is they stopped mining them because it, I think it cost more.
- [64:56]
Carol Massar
But this is different. This is the Federal Reserve in circulation versus the US not producing them new ones.
- [65:01]
Podcast Host (possibly Carol or Tim alternating)
So they're pulling mean pulling them out of circulation.
- [65:03]
Michelle Korsmo
Yeah, there are 300 million pennies that are in circulation right now in the U.S. and so there should be enough pennies rolling around that we can keep using pennies even though they are not mint.
- [65:17]
Carol Massar
Have they checked the couch cushions?
- [65:20]
Michelle Korsmo
That's mine.
- [65:22]
Carol Massar
Or my husband's pocket or the washing machine. That's usually where they so true.
- [65:27]
Juliette Feld Grossman
Pick up those pennies.
- [65:28]
Michelle Korsmo
It matter.
- [65:29]
Podcast Host (possibly Carol or Tim alternating)
And those single socks. Michelle, thanks so much. Michelle Korsmo, president and CEO of the National Restaurant association trade group for the restaurant industries.
- [65:37]
Carol Massar
If a Lenovo computer for your business is on your holiday list, don't shop around. Just go directly to the source Lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business, like the ThinkPad X914 Aura Edition and Yoga 7i my 2 in 1. So avoid all that shopping chaos and price comparing and just go directly to the source lenovo.com where PCs are up to 35% off. That's lenovo.com.
- [66:07]
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- [67:11]
Audiobook Host
Hey audiobook lovers. This week on the podcast I'm sitting.
- [67:14]
Carol Massar
Down with musician, producer and walking encyclopedia Questlove. We're talking about Mark Ronson's memoir Night how to be a DJ in 90s New York City.
- [67:25]
Audiobook Host
All right, like we talked about before, Mark Ronson found sanctuary in the DJ booth.
- [67:29]
Carol Massar
What's a tool or piece of equipment.
- [67:30]
Audiobook Host
In the studio or on stage that.
- [67:32]
Carol Massar
Gives you the most control? So I have two microphones on stage. We have the microphone that you hear as the audience. Then we have a second microphone in which we communicate with each other. Other. I feel like that second microphone kind of saved all of our friendships. No, no band likes each other after 20 years or 25 years. Like the Beatles broke up in seven and a half years and we're going on 35. Listen to Earsay, the Audible and iHeart.
- [68:01]
Audiobook Host
Audiobook Club on the iHeartradio app or.
- [68:04]
Carol Massar
Wherever you get your podcast. Stay cozy, stay home and save big online during Lowe's December deal drops. Because honestly, why go anywhere when the deals come to you?
- [68:20]
Podcast Host (possibly Carol or Tim alternating)
Check this out.
- [68:21]
Carol Massar
Lowe's is going to give you two.
- [68:22]
Podcast Host (possibly Carol or Tim alternating)
Free select tools from dewalt, Craftsman or.
- [68:25]
Michelle Korsmo
Cobalt when you buy a select battery or combo kit.
- [68:28]
Carol Massar
Yep, two tools free. It's basically a holiday miracle.
- [68:32]
Michelle Korsmo
Plus, rewards members get free standard shipping all month long. Yet another reason not to leave your couch. Kick back, click around, let the savings roll in. Shop New December deal drops on lowe's.com every week this month.
- [68:45]
Carol Massar
Fresh deals, cozy vibes.
- [68:46]
Michelle Korsmo
Zero effort.
- [68:49]
Carol Massar
This is the Bloomberg Business Week Daily Podcast. Listen Live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station just Just say Alexa, play. Bloomberg 11:30. Well, from Utah to California, ski resorts across the west delayed their opening days. This due to a lack of natural snow as well as temps that were too warm to make snow. So we're talking about Jackson Hole in Wyoming, Park City and Deer Valley in Utah, Schweitzer Mountain Resort in Idaho, Heavenly and Northstar in California. They all opened later than originally planned.
- [69:27]
Podcast Host (possibly Carol or Tim alternating)
I'm going to let you keep going because you've been so excited about this.
- [69:30]
Carol Massar
This has serious economic implications in the towns and, and states where these resorts operate. According to the Bureau of Economic Research. It came out last year and it said that snow activities in the economy for the US was a $7.7 billion business in 2023. And that in Colorado, Utah and California, it was the, quote, largest conventional activity.
- [69:50]
Podcast Host (possibly Carol or Tim alternating)
It's a big deal.
- [69:51]
Carol Massar
It's a very big deal.
- [69:52]
Podcast Host (possibly Carol or Tim alternating)
Yeah.
- [69:53]
Carol Massar
For more on the ski industry and how this season is looking, we welcome Bob Shea. He's founder and CEO of Surefoot. Surefoot is the biggest custom ski boot company in the world. They've got 29 locations in North America, Canada, and Europe. Bob joins us here in the Bloomberg Interactive Brokers studio. Welcome. How are you?
- [70:08]
Audiobook Host
Thank you. Good. I'm really good.
- [70:09]
Carol Massar
So for people who aren't familiar or haven't stepped foot into a Surefoot, explain the process, because I think people understand ski boots. But then Surefoot takes the shell and then. And then customizes it. What do you guys do?
- [70:19]
Audiobook Host
I mean, basically a person comes in the door and then there's some conversation with them to find out their history of skiing and how much they've skied, what level they're at and everything. And then they're kind of evaluating. But then the technical part starts. We put your foot onto a 3D imaging machine, which makes an orthotic for underneath your foot. The first step in there, and then we put you onto another image that takes a scan of your foot. So it really, what we do at that scan is we match that to the shell. So we basically have a visual of your foot. Exactly. And we match it into. We find the right shell for you. So now that shell matches your ability, your history in skiing, what your. What you enjoy about the sport. And then we put it together with a custom liner that we make. And we have numerous different ones, about five or six ones. So we, you know, looking at your foot, decide from there which one's going to work best for you in the sport. And that whole process, because we sort of packaged it all together under the same Roof just takes about an hour. Where we can go from you walking in the door to walking out with a boot that's totally custom fit for your foot and ready to ski in.
- [71:28]
Podcast Host (possibly Carol or Tim alternating)
You've done this?
- [71:28]
Carol Massar
Yeah, I did this back in 2021. I finally got my first pair of Surefoot boots. I mean, I've lived in places where Surefoot has had locations, and finally I was like, you know what? I'm getting to my late 30s. I don't get ski boots very much. It's time for me to have, like, a really comfortable pair of boots. And I've wanted a pair of Surefoots.
- [71:47]
Podcast Host (possibly Carol or Tim alternating)
And they haven't always been comfortable.
- [71:48]
Carol Massar
No, they haven't. And, you know, the thing is, is. And you know, I had a scan done in like 2000, let's say 2007 maybe, for a pair of orthotics for cycling shoes.
- [71:57]
Audiobook Host
Yeah.
- [71:57]
Carol Massar
And they were able to tell when I went to the store that my foot had actually changed.
- [72:01]
Audiobook Host
Yeah.
- [72:01]
Carol Massar
Since that. So they had to make a. They had to rescan it and do a new pair of orthotics based on the new scan, because I guess that's what happens when you age.
- [72:09]
Audiobook Host
Yeah, Well, I think it's. It's. Most feet do that. You know, if you have some flexibility, mobility in your foot, it's wear and tear, too, right? Yeah, but go ahead. Yeah, yeah. Over time, it really, you know, your foot's going to change a bit, and the scans are extremely precise. So it's, you know, we can be talking about a minute difference, but that minute difference is a big deal. It's a big deal in biking shoes if you're really into it, and it's a big deal in ski boots.
- [72:33]
Podcast Host (possibly Carol or Tim alternating)
Bob, how did you get to this point? Because it, to me, it makes a lot of sense. And I'll be honest with you, I wear orthotics in just general, and it just makes such a difference in shoes and sneakers and what have you. How did you get to this point?
- [72:43]
Audiobook Host
You know, really, it started I grew up skiing and ski racing and boots always just killed my feet. Like, really, I have very wide forefoot and boots. You know, when you're trying to jam into a ski racing boot, it's just, there's a lot of pain. And I really. It took time off the slope. I couldn't stay out as long as I wanted to as a kid. And so over time, it just started developing ways to make it a little better. And then as I got done with ski racing in college, I was like, I don't want to leave this sport. I love the sport. I can make a difference in it. So that was really the impetus for it, you know, thinking about it and then, and then a lot of trial and error. I mean, crazy trial and error.
- [73:23]
Podcast Host (possibly Carol or Tim alternating)
What was the. Tell us what was some of the errors?
- [73:26]
Audiobook Host
I can, I don't remember. One of my first employees is that John Higgins was, you know, he was on the u. S. Ski team, collegiate ski racer. And we were together. We're trying to make a pair of boots for me with a new, this foam material that we had found. So we, we inject it into my foot and he gets it all over his hands, everything. And then I'm standing there and it feels like it's gonna break the bones in my foot. I'm like, john, you, you gotta get this off. You gotta get this off my foot. It's breaking the bones. And a guy was walking by kind of through the back corner of the space that we were in, and he was a chemical engineer, and he looks at John and goes, if you don't get that off your hands in the next like 30 seconds, it's never coming off. So now John takes off to get that off his hands.
- [74:11]
Sally Librera
Oh, my God.
- [74:12]
Audiobook Host
And I've got this on my foot.
- [74:13]
Michelle Korsmo
You're like, hey, hey, remember me?
- [74:16]
Audiobook Host
I think it's breaking the bones in my foot. And I'm like, but luckily it didn't. And he got it off his hand. And we probably took a step back for a couple of years from that, but that's really how it began.
- [74:26]
Carol Massar
So we're going to talk more about the origin story in a few minutes. And before we get there, one of the reasons we wanted to talk to you is because you serve this higher end consumer. And we talk a lot about what the economy looks like right now. And just when you talk about skiing in general, you're already talking about a segment of the consumer that can afford to travel to a ski area, pay for an expensive lift ticket, oftentimes stay in an expensive area, and then do something that requires expensive equipment. Give us an idea. And you're a private company, so it's, you know, we don't have access to a ton of your own data. But how are, how is the consumer you're dealing with right now? How are sales? What are some numbers you can give us?
- [75:02]
Audiobook Host
I mean, I think all of us are always a little, you know, you just kind of have this tendency when you're in business, you know, you're a little worried. But right now things are Actually going along pretty well. You know, we. Business were up a little, but then as you were talking about just before how we didn't have snow, we take a dip, you know, with that when it's early. But in general terms we see the consumer is fairly strong, you know, coming in and, you know, you know, what's really happened, Timothy? I think that people recreation is just a bigger part of our lives. We all have, you know, we want to do that, we want to be out there. And luckily we're in the sport that people really love.
- [75:43]
Podcast Host (possibly Carol or Tim alternating)
Bob, have you seen that coming off the pandemic of people even like kind of that obviously after the pandemic, it was like I got to get out in the world because I couldn't for so long. But do you see it kind of lasting?
- [75:55]
Audiobook Host
Yeah, I mean, honestly, I see it. My own company, how many people are in. In there? I think it became more important for everybody. You know, it's like you're out of the office a bit, you got outside and it just, it seems healthy. And that's what to me, it seems like happened in the mountains. We look at it like it's a healthy place to be to exercise and stuff. And so I think it's good for the. It's good for my business, good for the sport, my life.
- [76:19]
Carol Massar
Well, people in New York City know that you have a store in New York City, but it's kind of a unique store because it's, it's not near a ski mountain. I think every other store that you have, maybe save for Vancouver or London. Yeah, yeah. You know, is. Is right at the base of a ski mountain is New York. Your. Your like the biggest location in terms of what it does in sales.
- [76:39]
Audiobook Host
It was the first. It was the first city store. It's not our biggest volume store. You know, we have that in the mountains. But many of our stores are very similar in size. But really why we put them here is because, you know, there's just people who want to. There's different personalities. They want to get it done before they go to, you know, on their trip and those there. And now you can get the exact same thing. So really early season, our city stores flourish.
- [77:04]
Podcast Host (possibly Carol or Tim alternating)
I mean, how busy are you right now? Is it crazy, really?
- [77:07]
Audiobook Host
Yeah. You know, honestly, it's most fun part of my job. I was in the New York store this morning for, you know, and it's just, I love when it's just busy in there and everyone's talking about sport and skiing and enjoying it very briefly.
- [77:20]
Carol Massar
You bought a company back in 2012. That is not a winter company.
- [77:25]
Audiobook Host
Yeah.
- [77:25]
Carol Massar
And now that's attached to the store in New York City. In terms of running, how big of a growth area is running for you?
- [77:31]
Audiobook Host
You know that that's, I mean, the reason we got into running was because we were runners to stay in shape for skiing. I mean, you know, we all run and you know, as part of it and then because the orthotics that we make, the custom, you know, the basis of the ski boot is used by so many athletes and runners, like Boston Marathon winners and so many people. That's where it really came from is that we knew a lot about feet and running and what we could, we could do with that. It's great for us. It gives it more of a year round business for us, more opportunity for people.
- [78:04]
Carol Massar
You also don't franchise at all. I'm sure this has come up when people have come to, hey, you should franchise this. Why not?
- [78:10]
Audiobook Host
You know, we get asked once a week about the franchising thing at least. But you know, it's just that we wanted to have better quality control over it and we want to give our employees opportunity. And that's what really comes down to, is that we, in order to open more stores, we train people and when they're ready to go to store, like our most recent store we opened in Big Sky Crisis, the manager there worked for us a long, long time and he wanted to move there. So we opened a store there.
- [78:38]
Carol Massar
That's pretty cool.
- [78:38]
Podcast Host (possibly Carol or Tim alternating)
I think that's pretty cool. I mean, I'm also assuming that folks have reached out to either invest in you, buy you up, like.
- [78:46]
Audiobook Host
Yeah.
- [78:47]
Podcast Host (possibly Carol or Tim alternating)
And you just, you're. You want to continue go it alone.
- [78:50]
Audiobook Host
Yeah, you know, I think it's, it's. We've had, you know, we have had minority investors and stuff in there, but we've also had some hard knocks with those. And so as long as we control the business and we enjoy what we're doing and you know, we have. My daughter is in the business. My, you know, we have family in the business. I want to do it for a long time.
- [79:10]
Carol Massar
Yeah, go ahead.
- [79:11]
Podcast Host (possibly Carol or Tim alternating)
What's your supply chain like? Is everything down in the U and I in the US do you have to.
- [79:15]
Audiobook Host
I wish it was all done in the US that, you know, it's. I really wish that it was done here, but we're not able to. There's just things that are not so. Yeah, we've had challenges with the supply chain. Right now we try to mitigate them and the cost and, and the tariffs have gone up. Yeah, yeah. I mean, that's a tough, it's been a tough thing too. And I really think, I look back and say, wow, I'm glad this didn't happen when we were in business five years or something. I don't, I don't know how a small business gets through it. You know, we're a little able to manage it a little better. But.
- [79:46]
Podcast Host (possibly Carol or Tim alternating)
Yeah.
- [79:46]
Carol Massar
The biggest story in the ski industry obviously is, is snow and making sure that people can actually get on mountains. The second biggest story in pretty much any ski town that you go to is the cost of living.
- [79:58]
Audiobook Host
Yeah.
- [79:59]
Carol Massar
And I'm wondering, you are known for having these long tenured employees who live in the communities where you have stores. And these are very transient communities because they're, they're ski areas where people come for the season and then leave. How do you, how do you make sure that you can have employees that can actually live somewhere? Like attracting and retaining a long term employee in a place where truly nobody can afford to live?
- [80:22]
Audiobook Host
Yeah, it really has. I mean, you know, we talk about it being so hard right now, but it, you know, there's been many points where it has been, but our, what we've always tried to do is make our employees really productive. The whole system that they do and then pay them the best that we can in there. But it is a challenge, you know, in there and you have to. Yeah, we have to deal with, I mean, look at, some of these markets are crazy, crazy expensive now. So we have some employee housing. But the real thing is how we.
- [80:50]
Carol Massar
Keep, we do have employee housing.
- [80:51]
Audiobook Host
Yeah, yeah, we do. We have employee housing, all the big markets. But that's more for new, new employees that are, you know, coming into the.
- [81:00]
Podcast Host (possibly Carol or Tim alternating)
The company, like to help them get settled and.
- [81:03]
Audiobook Host
Yeah, you know, their first, second year. But all of our, you know, management and everything, we've always wanted the company. You know, I always say if we're not going up, we're going out. We have to go up to give employees opportunity to keep growing, keep growing in there. And that gives employees opportunity. Their stores keep growing, get bigger. They can be rewarded more for that and compensated. But no doubt it's, it's a big challenge.
- [81:25]
Podcast Host (possibly Carol or Tim alternating)
Where's the growth in your industry? Like, how do you think? I mean, 40 years you've been doing this. Like, it sounds like you still look for new opportunities constantly.
- [81:32]
Audiobook Host
I mean, really what it comes down to is we're still a small percentage. You know, we're probably somewhere around 3 or 4% of the dollar volume of ski boots sold in the world. And so we have a lot of room to grow in that.
- [81:44]
Carol Massar
Would you ever consider making your own ski boot? Just to remind everybody the shit. You buy the shell from a company that makes the ski boot and then you do the liner and kind of everything else. But would you ever make an actual sure foot ski boot?
- [81:56]
Audiobook Host
Yeah, I mean, we have, right now we have 3D technology that we're working on and with boots and everything. But I think as long as we can get the shell that we think is really great for a customer in the market, then we'll keep doing that. So what we really do is we buy the shell without the liner, so it saves the consumer money. And then we have a great shell on the outside and the, the interior we've made. But we, we are always working on. So if I come up with a great idea about a shell, you'll see it.
- [82:24]
Podcast Host (possibly Carol or Tim alternating)
You know, but in terms of growth, like, okay, no offense, but I'm like thinking, wait, I got orthotics, but these sound better. Like, can you. In terms of the medical market or people who go to foot doctors, what's the percentage, like, through your machine like that you have?
- [82:39]
Audiobook Host
It's a percentage even in that market. Yeah, we're small. Even with. We're one of the largest makers of orthotics in the United States. But by actually kind of a long shot, we are. But we make so many in our stores. If you combine what we do in our stores and what we do in our factory, we're by far the largest. But there's lots of room because a lot of people don't really know how beneficial they are to you.
- [83:00]
Podcast Host (possibly Carol or Tim alternating)
Right.
- [83:00]
Audiobook Host
So if, if something happens to you, if all of a sudden you have plantar fasciitis, your foot's hurting, you're aching from running, that's when you start seeking us out.
- [83:09]
Podcast Host (possibly Carol or Tim alternating)
So, Bob, if somebody comes in and gets an orthotic through you, I mean, is it covered by insurance?
- [83:15]
Audiobook Host
It is if a doc, you know, if they have a prescription for it. Majority of what we sell are not that. That's not really true. In our medical division, it's mostly prescription, and then in our consumer, it's not. But, you know, they are covered and they're the same scan. So we can make. We can do anything with that. You know, with this.
- [83:34]
Podcast Host (possibly Carol or Tim alternating)
It just seems like a matt market. Like, it's major.
- [83:37]
Audiobook Host
It is a big market.
- [83:38]
Carol Massar
Yeah, well, the reason you have that market is because you bought this company and fit the orthotics company based in Vancouver, Washington. Back in 2023. You bought Super Runner shops back in 2012. Any more acquisitions on the horizon?
- [83:50]
Audiobook Host
You know, right now we're doing something really big that we're about to introduce our own line of footwear. And the footwear is made specifically for orthotics to fit your orthotics in it. So. So you have a perfect platform. Like right now in ski boots, you have a perfect platform. When we make the boot, little thing so you're standing totally aligned, but a.
- [84:09]
Carol Massar
Pair of shoes, you pull out the insole. The orthotics can be bigger than the insole.
- [84:12]
Audiobook Host
It doesn't fit quite right and you can't get it in there. So we are, in a few weeks, we're about to introduce a line of shoes that is just for that. So when you get aligned, scan your bodies put into alignment, you put it into our shoes, you're going to stand in a very balanced, comfortable position.
- [84:31]
Podcast Host (possibly Carol or Tim alternating)
You guys are doing this on your own or is it a collaboration?
- [84:33]
Audiobook Host
We're doing it on our own.
- [84:34]
Carol Massar
I think we're breaking some news here that's pretty cool.
- [84:37]
Audiobook Host
You know, I debated whether I should even say there's on here, but it's a big deal. We've been working on it for years and it's really cool. We have some. I was just at the World cup in Vail and I had on a pair of the winter boots and I had like four or five people ask me about them. What are those? Where are the. I'm like, oh, nice. We have a little, little luck here with the product.
- [84:58]
Podcast Host (possibly Carol or Tim alternating)
Men and women.
- [84:59]
Audiobook Host
Yeah, we have men and women. Yeah, of course we have men and women. Ski run everything.
- [85:04]
Carol Massar
Very cool. Hey, Bob, come back and hang out with us anytime you're in New York. Really appreciate it.
- [85:08]
Audiobook Host
Thank you very much.
- [85:09]
Carol Massar
Founder and CEO of Shirt here in the Bloomberg studio. This is Bloomberg. If a Lenovo computer for your business is on your holiday list, don't shop around. Just go directly to the source Lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business, like the ThinkPad X914 Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source lenovo.com where PCs are up to 35% off. That's lenovo.com lenovo.
- [85:44]
Podcast Host (possibly Carol or Tim alternating)
Lenovo.
- [85:47]
Odoo Advertiser
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- [86:51]
Audiobook Host
Hey audiobook lovers. This week on the podcast I'm sitting down with musician, producer and walking encyclopedia.
- [86:57]
Carol Massar
Questlove, we're talking about Mark Ronson's memoir.
- [87:01]
Audiobook Host
Night how to be a DJ in.
- [87:03]
Carol Massar
90S New York City.
- [87:05]
Audiobook Host
All right, like we talked about before, Mark Ronson found sanctuary in the DJ booth.
- [87:09]
Carol Massar
What's a tool or piece of equipment.
- [87:10]
Audiobook Host
In the studio or on stage that.
- [87:12]
Carol Massar
Gives you the most control? So I have two microphones on stage. We have the microphone that you hear as the audience. Then we have a second microphone in which we communicate with each other. I feel like that second microphone kind of saved all of our friendships. No band likes each other after 20 years or 25 years. The Beatles broke up in seven and a half years and we're going on 35. What? Listen to Earsay, the Audible and iHeart.
- [87:41]
Audiobook Host
Audiobook Club on the iHeartradio app or wherever you get your podcasts.
- [87:52]
Carol Massar
Stay cozy, stay home and save big online during Lowe's December deal drops. Because honestly, why go anywhere when the.
- [87:59]
Audiobook Host
Deals come to you?
- [88:00]
Podcast Host (possibly Carol or Tim alternating)
Check this out.
- [88:01]
Carol Massar
Lowe's is Gonna give you two free select tools from DeWalt, Craftsman or Cobalt.
- [88:06]
Michelle Korsmo
When you buy a select battery or combo kit.
- [88:08]
Carol Massar
Yep, two tools free. It's basically a holiday miracle.
- [88:12]
Michelle Korsmo
Plus rewards members get free standard shipping all month long. Yet another reason not to leave your couch. Kick back, click around.
- [88:19]
Carol Massar
Let the savings roll in.
- [88:21]
Michelle Korsmo
Shop New December deal drops on lowe's.com.
- [88:23]
Carol Massar
Every week this month fresh deals, cozy vibes.
- [88:26]
Michelle Korsmo
Zero effort.
- [88:29]
Carol Massar
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130.
- [88:47]
Podcast Host (possibly Carol or Tim alternating)
Are you a circus kind of guy?
- [88:50]
Carol Massar
I am a circus kind of guy.
- [88:51]
Podcast Host (possibly Carol or Tim alternating)
Are you really?
- [88:51]
Carol Massar
Yeah, I'm a circus kind of guy. Carol, do you remember a couple weeks ago we spoke about the Tiger Global alum? His firm is betting on prying people off their screens.
- [88:59]
Podcast Host (possibly Carol or Tim alternating)
Yes.
- [89:00]
Carol Massar
Money goes to travel, live events, fitness of spectator sports.
- [89:04]
Podcast Host (possibly Carol or Tim alternating)
Right. And he's thinking about that in terms of investment plays.
- [89:06]
Carol Massar
Yeah. Focused on.
- [89:07]
Podcast Host (possibly Carol or Tim alternating)
Yeah. So live events, definitely. Our next guest. Focus our companies behind the Ringling Brothers and Barnum, Barnum and Bailey Monster Jam. Also Disney on Ice, Monster Energy. I don't even know all of these things. AMA Supercross and the Super Motocross World Championship.
- [89:23]
Carol Massar
Vroom, vroom. Come on, Carol.
- [89:25]
Podcast Host (possibly Carol or Tim alternating)
Says the dad of a little boy.
- [89:26]
Carol Massar
We're talking about Feld Entertainment's family owned and operated. Here with us now is Juliette Feld Grossman, CEO of Feld Entertainment. She joins us from Florida. Julie, welcome. Good to have you on the program. Multiple events, 80 countries, six continents. You've got a great view of the consumer. How's business?
- [89:43]
Juliette Feld Grossman
So, as you mentioned, we represent a number of different properties. Ringling Brothers Farm, Bailey Circus, Monster Jam, Super Motocross and Disney on Ice. And across all the those properties, we do about 2,800 performances per year in 240 cities, performing to about 14 million audience members. And so we obviously see the economy from a lot of different vantage points and we are in many different territories worldwide. I can tell you what we're seeing right now in the US is really a tale of two economies which is playing out across a number of other industries as well. So we see the affluent consumer who's excited to spend on VIP experiences on merchandise, all of the plussing up they can get. And then of course, we see, you know, lower middle income consumers having a harder time, less discretionary income due to other costs in their lives. And so our focus is always on a very wide and diverse, you know, economic spectrum. So we put a lot of effort into reaching across that spectrum to customers and offering a variety of price points and reaching them through different marketing strategies to let them know that we're here and that we have, we have all those options available.
- [91:07]
Podcast Host (possibly Carol or Tim alternating)
So who do you think your customer is? And I am, I'm looking like at Barn, Barnum, Ringling Brothers and Barnum and Bailey Circus tickets for the Barclays center in 2026. And I'm just kind of scrolling up right now. I'm at tickets that are 95, 99.
- [91:23]
Carol Massar
Are you at a reseller, Carol, or you. Are you going directly?
- [91:26]
Podcast Host (possibly Carol or Tim alternating)
Eventticketscenter.com Is that a reseller?
- [91:30]
Juliette Feld Grossman
Well, we hope you'll go. We hope you'll buy direct. That is a reseller.
- [91:36]
Podcast Host (possibly Carol or Tim alternating)
All right, so, Tyler, talk to us about your pricing here. All right, I'm going to your site. Sorry, Google took me to the wrong place. I'm blaming Google here.
- [91:41]
Juliette Feld Grossman
So in the venue, we've got thousands of seats. So based on, you know, how close you are, what position you are, you know, inside the venue, we offer different pricing and in some cases we may also have different experiences connected to, you know, different price tickets. And so why we have, you know, front row tickets at a, at a higher price point, we also have tickets that are higher up in the venue at more affordable ticket prices. But what I will say is, you know, somebody who's been producing these shows for many years now, we always look to say, how can we make sure we have a great experience for everybody who comes to our shows? So we look at the quality of the production from many different, different vantage points as we're developing it so that no matter where you sit, you and your family have that great experience. You take home those memories and, and hopefully you come back many more times.
- [92:39]
Carol Massar
So in terms of the portfolio that you have, we're showing a lot of footage from Ringling Brothers and Barnum and Bailey right now. But you also do Disney on Ice, you do motocross events, Monster Truck stuff. The portfolio in terms of where revenue comes from, how is it divided?
- [92:55]
Juliette Feld Grossman
Well, we have many different tours. So by volume, we have eight tours of Disney on Ice that travel globally. We have five tours of Monster Jam, we have one tour of Super Motocross, 31 events across the season that is also broadcast live. And then we have one tour of Ringling Brothers Farm and Bailey. But we're very diversified in terms of our consumer touch touch points. So we also have a merchandise business that accompanies all of our tours. We have a very strong licensing program across our owned properties. We also have media and broadcast rights associated with some of our properties too.
- [93:34]
Carol Massar
We're Bloomberg, so we, we love numbers. But you're a private, family held company. Can you just give us an idea of size, of revenue in A. In 2025 or 2024, for example?
- [93:44]
Juliette Feld Grossman
We are privately held, so we don't disclose that information.
- [93:47]
Carol Massar
Is it growing?
- [93:49]
Juliette Feld Grossman
Yes, it is growing. And one of the things that we've strategically been working on is, you know, we've been a company and business that's about that special day, that day you get to come to our event. And now we're increasingly working on building that 365 day presence with our customers, building out a more franchise oriented strategy. So with Monster sir jam we since 2020 we've been the number one vehicle license worldwide. That's according to Circana. And so we have a very robust retail program with Walmart, Target, Amazon, not only in the US but globally. With Super Motocross we are on NBC and Peacock with our live broadcast. We also have a video pass that goes to over 140 countries and that's a subscription. So we have a lot of different ways in which we're reaching consumers. We're building out those touch points so that we continue to stay with them all year round and be top of mind.
- [94:50]
Podcast Host (possibly Carol or Tim alternating)
I'm curious, your portfolio, how do you expand it? What would you like to add to it?
- [94:55]
Juliette Feld Grossman
Well, we're always looking at new opportunities. We continue to look at new IP because we are both property owner and then we also license and then we're also looking at new ways of growing. Along with the relaunch of Ringling Brothers, Barnum and Bailey in 2023, this fall we launched a Ringling Kids channel. So we're developing premium kids content and a slate of characters that are introducing the circus arts and a lot of humor and circus talent into into families. And so we're looking there at building out more retail product line. We're building out media partnerships around that. And so we look at expanding our reach in that way. And with Monster Jam as well, we have a number of media opportunities underway and we're excited to be growing not only our number of properties but also the ways in which we're connecting with consumers and the monetization of those channels.
- [95:53]
Carol Massar
Hey, on the circus side of things, you produced the circus for years. I've always wondered where you find these performers and how you find these performers.
- [96:02]
Podcast Host (possibly Carol or Tim alternating)
Is it Tim is thinking about Juliet, you know, if this gig doesn't work out.
- [96:06]
Carol Massar
Yeah.
- [96:07]
Podcast Host (possibly Carol or Tim alternating)
How flexible are you?
- [96:08]
Carol Massar
Yeah, that ship has sailed. Not flexible enough. But you know, is it like this is the major leagues, are the farm teams, the regional style all over the world and you basically have scouts go and you find them that way.
- [96:23]
Juliette Feld Grossman
We have an in house casting and talent team who travel all over the world and they're visiting circus festivals, they're visiting schools. They're also in touch with a network of coaches and, and families and talent that they know. So we are sometimes Looking at, you know, acts that are already developed and created. But we're often creating our own acts based on ideas we have for something that, you know, the audience has never seen before. What we always want to do is surprise people and bring them something that they haven't seen in a really new and exciting way. So with this new production of Ringling Brothers, we are so excited. We have a bike troupe from China that has never been to us before, and they're doing incredible action acrobatics on bikes, including at the very end of the performance, they have, you know, about 10 people riding on bicycles and then one performer who runs across the backs of all the people on the bicycles. It is unbelievable. It has never been.
- [97:27]
Carol Massar
I did go to an amazing con. An amazing circus in China.
- [97:30]
Podcast Host (possibly Carol or Tim alternating)
Okay. Truly, I was gonna say, Juliet, you know, Tim does ride bikes. So I'm just saying, like, there is a high wire. Hey, On a serious note, you know, I think about circuses and acrobats and performers and different things, and a lot of times it comes from, you know, individuals who are from outside the United States. Immigration. How have you been impacted by immigration?
- [97:53]
Juliette Feld Grossman
We are fortunate. We have a very good team here who work on immigration, but we have performers from 17 different countries, and it is quite challenging. So we do work very far ahead of time to ensure we can bring our performers in. And sometimes there are. There are challenges in doing that. This time, we were fortunate that we're able to bring in everybody that we wanted to be a part of this show. But I can tell you, in our last production, we had a group of male comedians who are from the Ukraine, and we actually had to get a special notice from the Ukrainian Department of Defense to allow them to be a part of Ringling because they were not part of military service then. So we, you know, we work very hard to. To work to bring the best performers here, and I think that's something that really makes us stand out because we have this important infrastructure to support what we're doing. We can bring in the best performers. We have a lot of experience and a lot of credibility as the greatest show on earth.
- [99:02]
Podcast Host (possibly Carol or Tim alternating)
Well, really great to get some time with you, so appreciate it, and I hope we can get you back in the new year. Good luck with the holiday season. Really great to have with us Juliette Feld Grossman. She is chief executive officer of Feld Entertainment.
- [99:15]
Carol Massar
Joining us, this is the Bloomberg Business Week daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal. If a Lenovo computer for your business is on your holiday list, don't shop around. Just go directly to the source lenovo.com it's your last chance to get exclusive deals on the PCs you want for your business, like the ThinkPad X914, Aura Edition and Yoga 7i 2in1. So avoid all that shopping chaos and price comparing and just go directly to the source lenovo.com where PCs are up to 3. 35% off. That's lenovo.com lenovo Lenovo.
- [100:17]
Podcast Host (possibly Carol or Tim alternating)
Amazon Five Star Theater presents real customer reviews performed by Eva Longoria tonight's review sports briefs oh boy, where do I even start with these performance mesh boxer briefs? These boxer briefs are like a magician's trick. You know the one where you go, where did that rabbit come from? So if you're looking for underwear that not only performs well, but also gives your package the attention it deserves, then look no further. 5 stars Nickalicious shop the perfect gift this holiday season on Amazon.
- [100:57]
Carol Massar
This is Jacob Goldstein from what's yous Problem? Business software is expensive, and when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory to accounting.
- [101:32]
Chris Whelan
All linked and talking to each other.
- [101:34]
Carol Massar
Check out odoo@odoo.com that's o d o o.com Oral health goes beyond just aesthetics. It's deeply connected to your general health and well being. That's why preventing oral health problems before they start is so important. When you use the Colgate Total Active Prevention system, you're not just helping to prevent oral health problems like cavities and gingivitis. You're laying the groundwork for overall wellness. Colgate Total's three product routine includes a reformulated toothpaste, an innovative toothbrush, and a refreshing antibacterial mouthwash that all support a healthy mouth. In fact, the three products were designed to work together to be 15 times more effective at reducing bacteria buildup in six weeks starting from week one. Compared to a non antibacterial fluoride toothpaste and flat trim toothbrush. Take control of your oral health and get the Colgate Total Active Prevention System today so you can be dentist ready.
- [102:28]
Tim Stenovec
Visit shop colgate.
- [102:30]
Carol Massar
Com Total.